Question Everything

In times like these, you should be taking a close look at your investments.  Do they really make sense?

I try to break everything down to be as simple as possible, so here goes.  When you begin to consider investing, what is your starting point?  I begin with the most diversified, lowest cost approach.  That has been index-type investing for quite some time.  Setting aside the important discussion of how much to allocate among various indexes, the first question should be why would you do anything besides an index-type approach?

That simple question has led me on a quest that has lasted my entire career.  The answer led me to leave a career with a Fortune 100 company that created its own products in order to focus on a finding a better method.

If investors analyze the risk and return of their existing investment approach, I would be willing to bet that the vast majority would have been better off by simply investing in a diversified index-type approach.  Plenty of academic studies back me up on this.

I believe that there are some approaches that fine tune the concept of low cost diversification better than others, but a lot of time is wasted on finding some elusive “guru” who turns out to be a costly disappointment.

WHY ARE YOU USING YOUR CURRENT APPROACH?  HOW DOES IT PERFORM?